MUMBAI, OCT 29: Stock markets across the country reeled under sustained bear hammering and selling by foreign institutional investors (FIIs) on Friday. With bears tightening their grip and the Reserve Bank's credit policy disappointing the market, the benchmark Bombay Stock Exchange Sensex which crashed by over 225 points initially recovered partly later but still showed a whopping loss of 150 points.The selling spree on bourses accentuated with the FIIs booking profits ahead of the normal year-end closing of accounts and Y2K bug. Moreover, the rationalised margin system on the BSE, introduced last Monday, forced a number of small operators to liquidate their position. Small investors have also joined the selling spree following the steep fall in Sensex in the last fortnight. With this, Sensex has fallen by 724 points from its peak of 5150.99 points on October 11, 1999.Sensex opened marginally up at 4601.40 but later turned weak and dropped to the day's low of 4368.85 around midsession. However, a modest recovery at the fag end lifted the Sensex to close at 4444.56 as against yesterday's close of 4594.57, still showing a sharp fall of 150.01 points or 3.26 per cent. The BSE-100 index tumbled by 86.68 points to 2071.50 from previous close of 2158.18.In the past couple of weeks, operators had built up huge long positions putting the market in an overbought zone. Marketmen were optimistic that the Sensex would hit an all-time high during Diwali festival with a stable government at the centre. However, the sudden change in the attitude of the principal market mover FIIs who had been net sellers for the last few weeks forced operators to wind up their long positions at the last day of the current settlement. ``FIIs normally close their accounts in December worldwide. The current FII selling is part of the book adjustment. They might start investing in January once again,'' said an FII analyst. FIIs had already pulled out over Rs 2,000 crore from Indian markets in the last two months.The political news too was not so encouraging with reports indicating the second generation reforms were in danger following signals that the Congress party might vote against the Insurance Regulatory Authority (IRA) and other bills in the Rajya Sabha. Besides, the credit policy announced by the RBI disappointed marketmen as there was no proposal for the capital market.Almost 95 per cent of the stocks in the specified list showed a sharp fall on Friday. The fall was triggered by Infosys which fallen by nearly 4 per cent in the half-an-hour of the day. The selling then spread to heavy weights like ITC, Ranbaxy, SBI, MTNL, Bhel, and Reliance. However, during the later half of the day, SBI showed a sharp recovery which helped the Sensex recovery.SBI managed to show a gain of over two per cent from its previous close. NIIT also provided some help with a recovery of over 8 per cent from its low. On previous close, it gained 4 per cent. The position in other index-based counters was far from impressive. In fact, counters like Ranbaxy, Telco, ITC, Infosys, Bhel, MTNL, and Castrol showed a fall of over 5 per cent.Almost all the sectors were affected by panic selling. The software sector was the main target. The selling which started with Infosys spread to other counter before the noon. Panic was seen on counters like Pentafour Software, Silverline, Global Tele, Himachal Futuristic, Digital Equipment, Tata Elxsi, and HCL Infosys.
